Letter to the Chairman from Angela Eagle
MP, Exchequer Secretary, HM Treasury
Thank you for your letter of 10 July to Jane
Kennedy asking whether the Treasury would like to add any further
evidence to that already submitted to the Committee in the session
of 31 October last year. I am responding as the Minister responsible.
I would like to reiterate that as officials
stated in that session the Government is committed to a strong
and vibrant UK oil and gas industry and has a specific objective
to maximise the economic recovery of the UK's oil and gas reserves.
The Government believes that the North Sea fiscal
regime continues to promote investment, whilst ensuring that the
UK taxpayers receive a fair return from the exploitation of the
UK's national resources.
The increase in the rate of supplementary charge
at PBR 2005 acted to restore the balance between producers and
consumers in light of the significant increases in the oil price
since 2001, increases that have continued, with oil prices recently
touching $80 a barrel in September this year.
Since the evidence session last year Treasury
officials, alongside HM Revenue and Customs, and the now Department
for Business, Enterprise and Regulatory Reform, have continued
to discuss potential structural issues within the North Sea fiscal
regime with the oil and gas industry.
Alongside Budget 2007 the Treasury published
a discussion paper setting out its conclusions on the discussions
that had occurred since PBR 2005, and I include a copy of that
document for the Committee (not printed).
Since Budget 2007 officials have continued to
discuss the issues raised with Industry, and as stated in this
months Pre-Budget Report, Government will now be considering its
conclusions and will be publishing a consultation document in
due course examining the options for further actions.
I look forward to seeing the outcome of the
Committee's inquiry. I am copying this letter to the Secretary
of State for Scotland.
Angela Eagle MP
HM Treasury
October 2007
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